The Greek press wrote about a last-minute offer that had been made to Greece by the European Commission in an attempt to reach an agreement before expiration at midnight, the deadline for payment of a tranche of 1.6 billion euros International Monetary Fund (IMF).
But German Chancellor Angela Merkel has publicly stated that she don’t know anything about such an offer, stating that the only plan that the Berlin government consider is the one proposed Friday and on which Alexis Tsipras, tyhe Greek prime minister has called the population to decide on referendum Sunday.
Here is president Obama opinion: „In simple terms to the American people, the Greek crisis is not something that we think will be a major shock to the system US financial system” said Obama during a joint press conference at the White House with Brazilian President Dilma Rousseff .
“But obviously, it is extremely painful for the Greek people and can have a significant impact on the growth rate in Europe,” he added.
Daily Market Analysis – 01st July, 2015
By FxGrow Research & Analysis Team
Greece defaults on $1.7 billion IMF payment
Greece has defaulted on its payment to the IMF on June 30 and became the first developed nation to do so. Greece is now into a deeper recession as its bailout program has expired and now it is cut off from the access to IMF resources. International Monetary Fund in an organization that helps the world economy remains stable.
“I confirm that the about EUR 1.5 billion due by Greece to the IMF June 30 has not been received. We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared” - Director of Communications, IMF.
The ECB’s policymaking governing council was to meet in Frankfurt to decide whether to maintain, increase or curtail emergency lending that is keeping Greek banks afloat despite a wave of deposit withdrawals and the state’s default. - Reuters.
“Greece was fully committed to service its external debt in a manner that secures the viability of the Greek economy, growth and social cohesion” - Greek Finance Minister Yanis Varoufakis.
Greece has received nearly 240 billion euros in two bailouts from the European Union and IMF since the start of the program in 2010.
“What would happen if Greece came out of the euro? There would be a negative message that euro membership is reversible” - Spanish Prime Minister Mariano Rajoy.
“Before the planned referendum is carried out, we will not negotiate over anything new” - German Chancellor Angela Merkel.
The risks of a default to the IMF forced European Central Bank to limit its emergency loans to Greek banks and Greece’s government was forced to institute capital controls in order to prevent mass exodus of cash out of the country.
“I think Mr. Tsipras screwed up the negotiations, frankly. Because he believed that Europe needs Greece as much as Greece needs Europe, and that is sadly not the case. So now I believe he’s in a state of panic because the banks have closed, people are complaining, they were queuing for hours over the weekend to get their cash out” - Miranda Xafa, Centre for International Governance Innovation.
Crude Oil is trading lower at $58.89 on uncertainty about the financial crisis in Greece.
Gold is trading lower in the Europe at 1171.60, while Silver is weak 15.57
01st July 2015 – 09:09hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
[B]Daily Market Analysis – 02nd July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]US ISM Manufacturing Index Rises to 53.5 in June[/B]
Manufacturing expanded in June as the PMI registered 53.5 percent, an increase of 0.7 percentage point over the May reading of 52.8 percent, indicating growth in manufacturing for the 30th consecutive month. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting - Institute for Supply Management.
Improvement seen in US manufacturing reflects stronger domestic spending with improving demand abroad. 11 out of 18 manufacturing industries expanded in June, led by makers of furniture and wood products. Producers of oil, metals, plastics and machinery said business contracted.
New orders rose to 56.0 from 55.8. The gauge of prices paid was unchanged at 49.5, compared with expectations of 51.0. June PMI indicates manufacturing activity has begun to recover from the softer demand, output and hiring levels experienced earlier in the year.
Globally falling oil prices have forced energy companies to curtail orders for new equipment and pipelines as their margins were squeezed and rigs were shut down. The stronger dollar made US goods more expensive overseas, which is weighing on sales.
In Eurozone finance ministers have ruled out any further talks on a fresh bailout for Greece until the country holds its referendum on Sunday.
Greek PM Tsipras has written to European leaders and the International Monetary Fund, accepting most of the conditions for the bailout.
“Greece is prepared to accept this staff level agreement subject to the following amendments, additions or clarifications” - Prime Minister Alexis Tsipras.
Greece is out of money after being cut off from European bailout funds and has defaulted to the IMF. If Greeks will vote for “Yes” a new bailout deal will take weeks and may need a change of government.
“How do you persuade European government to vote for a third bailout when the Greek government has actively campaigned in a referendum against the terms of a second bailout?” - James Nixon.
NZDUSD slid to a 5 year low as the monetary policy divergence New Zealand and the US and the strong US dollar are driving the New Zealand dollar to its lowest since May 2010.
Crude Oil is trading lower at $57.11 after progress on Iran Nuclear deal.
Gold is trading lower in the Europe at 1163.70, while Silver is weak 15.52
[B][I]02nd July 2015 – 07:48hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 03rd July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]US Non-Farm Payrolls increased by 223k in June[/B]
Total nonfarm payroll employment increased by 223,000 in June, and the unemployment rate declined to 5.3 percent. Job gains occurred in professional and business services, health care, retail trade, financial activities, and in transportation and warehousing - US Bureau of Labor Statistics.
Employment in other major industries, including construction, manufacturing, wholesale trade, information, and government, showed little or no change over the month - US Bureau of Labor Statistics.
The unemployment rate declined to 5.3% due to a decline in the labor force of 432K as the participation rated declined to 62.6% from 62.9%.
Recent US data suggests that US growth should pick up in the current and coming quarters. The June employment report leaves the door open for a first rate hike in September. The uncertain financial conditions in Greece may affect the timing of the first rate hike.
US Dollar was weaker after the Non-Farm payrolls came out, seen as mildly disappointing by the economists. While the expectations for two rate hikes before the end of the year are cut down, the expectations of a September hike are maintained.
With US holiday on Friday NFP data was released a day earlier, and we are unlikely to see major moves until the opening of the markets on Monday.
Focus is now shifting to Greece as Prime Minister Alexis Tsipras has called a referendum on July 5 for Greeks to decide if the country should accept what his government regards as a raw deal offered by its creditors.
On Monday, a larger than usual price gap between the market’s close on Friday and the open of the Asian markets is expected.
If the majority of Greeks will vote against the current deal drafted by the IMF, European Commission, and the European Central Bank, it will push the country closer to Grexit.
Meanwhile, European leaders are not ready to negotiate with Athens until the referendum has passed. According to some reports Germany might refuse to negotiate with Greek government post-referendum.
In UK business activity in the services sector outpaced estimates for the month of June. Markit services purchasing managers’ index came at 58 for June.
“In UK Growth is looking increasingly unbalanced. The recent weakness of the manufacturing PMI means industrial production looks likely to have declined in the second quarter, leaving the economy once again dependent on the service sector to sustain any growth. June’s rebound is therefore welcome news, but policymakers will want to see further improvements in the data, including signs of a sustainable upturn in pay growth, before feeling comfortable that the UK economy is ready for higher interest rates” - Chris Williamson, chief economist at Markit.
Crude Oil is trading lower at $56.52 7.11 after US oil drilling this week increased after 29 weeks of declines.
Gold is trading mildly higher in the Europe at 1168.70, while Silver is weak 15.65
[B][I]03rd July 2015 – 08:55hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
[/I]
[B]Daily Market Analysis – 06th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Global Markets sink after Greek voters rejected the terms of an International bailout[/B]
The final result of the Greek referendum, was 61.3% “No”, against 38.7% who voted “Yes”.
Global markets have sunk after voters in Greece rejected austerity plans demanded by International creditors, as the country’s future in the Eurozone is in danger.
The Nikkei 225 index dropped 2.1% to close at 20,112.12 on Monday. In South Korea, the Kospi index fell 2.4% to 2,054. And in Hong Kong, the Hang Seng index was down 3.3% to 25,205.56.
“As of tomorrow, Greece will go back to the negotiating table and our primary priority is to reinstate the financial stability of the country" - Greek Prime Minister Alexis Tsipras.
“Today we celebrate the victory of democracy. We proved even in the most difficult circumstances that democracy won’t be blackmailed” - Greek Prime Minister Alexis Tsipras.
“I’m fully aware that the mandate that I was given (by voters) is not for a rupture with Europe, but a mandate boosting our negotiating strength for reaching a sustainable deal" - Greek Prime Minister Alexis Tsipras.
“For recovery of the Greek economy, difficult measures and reforms are inevitable. We will now wait for the initiatives of the Greek authorities” - Jeroen Dijsselbloem, head of the Eurozone finance ministers.
“I believe that with the hard efforts of all sides, Greece’s economic situation will turn around. The economic crisis will be appropriately handled. Whether or not it can be appropriately handled will not only have an important impact on Greece and its people, but will have an important impact on … the world too” - Deputy Chinese Foreign Minister.
If there is no agreement on a deal, the European Central Bank will shut down Emergency Liquidity Assistance no later than 20 July. Banks will then not only be illiquid but would then turn bankrupt, and the lack of financing would trigger a collapse of the Greek economy.
“Euro area member states intend to make full use of all the instruments available to preserve the integrity and stability of the euro area (which would) complement any actions the European Central Bank may take in full independence and in line with its mandate” - ECB.
US stocks are poised to open sharply lower on Monday after Greeks rejected the terms of the bailout proposed by its International creditors.
Crude Oil is trading lower at $54.95 8.86 after Greece rejected debt bailout terms.
Gold is trading lower in the Europe at 1164.88, while Silver is flat at 15.62
[B][I]06th July 2015 – 08:32hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 07th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Greek debt crisis: Eurozone struggles to find solution[/B]
Eurozone leaders are meeting for an emergency summit in Brussels today to find a solution to the Greek debt crisis after Greece’s landslide rejection of bailout proposals. They are awaiting a new proposal from Greece after its Finance Minister Yanis Varoufakis announced his resignation.
“The prospects of a happy resolution of this crisis are rapidly diminishing. If there is no signal from these meetings that Greece and the Eurozone are ready to get around the table again, we can expect the financial situation in Greece to deteriorate rapidly" - George Osborne, British chancellor.
“Greece is a member of the euro. It is up to Greece and its government to act so that this can remain the case. It depends now on what proposals the Greek government puts on the table" - spokesman of Angela Merkel, the German chancellor.
Global leaders have expressed concerns about the ongoing Greek debt crisis and are looking for an amicable solution.
“It is now up to the government of Alexis Tsipras to make serious, credible proposals so that this willingness to stay in the Eurozone can translate into a lasting programme. Time is running out and there is urgency for Greece and the Eurozone” - French President Francois Hollande.
“Washington looked forward to Athens and other parties resuming conversations toward resolving the Greek situation. Such an outcome will allow Greece to make difficult but necessary fiscal and structural reforms, return to growth, and achieve debt sustainability within the Euro zone” - Jack Lew, US Treasury Secretary.
“I understand why the Greek people are venting their frustration. Fiscal consolidation is not making progress. They are in deflation. The world expects Greece and the EU to cooperate on a final bailout plan” - Akira Amari, Japan’s Economics minister.
Greek Banks will run out of cash by next week as large parts of the Greek economy are hit by the imposed capital controls and closure of Banks.
Greek government is also running out of cash to pay public service wages and pensions to its citizens. The country is just days away from deciding whether to leave the Eurozone, if there is no financial support from the European Central Bank.
In UK Manufacturing production dropped 0.6 percent for the month of May, while Industrial production rose by 0.4 percent.
The Reserve Bank of Australia kept its Official Cash Rate unchanged at 2.00%.
“In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending.” - Reserve Bank of Australia.
US Non-Manufacturing PMI came in at 56 for the month of June according to the Institute for Supply Management.
Canada’s Purchasing activity rose for the month of June as Ivey PMI came in at 55.9.
“On the other hand, domestic demand is strengthening in regions that are less exposed to the energy sector” - Bank of Canada.
Crude oil plunged to $53.13 on concerns of Greek exit and persistent oversupply in the market.
Gold is trading lower in the Europe at 1166.39, while Silver is weak at 15.64
[B][I]07th July 2015 – 09:43hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 08th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Chinese stock market crash continues[/B]
China’s stock market crashed as the government announced more measures to try to boost the sagging market after a spectacular bull-run reversed course in June.
The Shanghai Composite Index has lost about €2.9 trillion in value in the crash, which is nearly 12 times Greece’s entire foreign debt, which is estimated at €242.8 billion, and more than 12 times its gross domestic product (GDP) which is reckoned at about €238 billion last year.
“At the moment there is a mood of panic in the market and a large increase in irrational dumping of shares, causing a strain of liquidity in the stock market” - China Securities Regulatory Commission.
“Also, the ripple effect from the market correction has yet to show up. We expect slower growth, poorer corporate earnings, and a higher risk of a financial crisis” - Analyst of Bank of America Merrill Lynch.
More than 1,300 companies representing about 40 percent of the value of companies in China have halted trading in an effort to stop the slide.
More than 500 China-listed firms announced trading halts on the Shanghai and Shenzhen exchanges on Wednesday, taking total suspensions to about 1,300 - 45 percent of the market or roughly $2.4 trillion worth of stock - as companies scuttled to sit out the carnage – Reuters.
“Fears about the risks to financial stability and the wider economy have contributed to negative sentiment toward commodities. The impact has been felt most in industrial metals, such as copper, where China is by far the most important consumer" - Analyst from Capital Economics.
In Eurozone, after the emergency summit in Brussels, European leaders have given Greece time until Thursday to present new proposals to secure a deal with creditors, and have called a full EU summit for Sunday.
“If this does not happen, it will mean an end of the negotiations with all the possible consequences, including the worst-case scenario, where all of us will lose. Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system. Tonight I have to say loud and clear that the final deadline ends this week” - European Council President Donald Tusk.
“The Commission does not want a Grexit. Grexit would be a terrible failure and we are fighting to avoid it.” - Pierre Moscovici.
Canada’s Trade deficit increased to C$3.3 billion deficit, while the volume of exports plunged 2.5% in May.
“On the other hand, domestic demand is strengthening in regions that are less exposed to the energy sector” - Bank of Canada.
Crude oil plunged to $52.37 on China stock market turmoil ahead of weekly supply data from US.
Gold is trading lower in the Europe at 1153.89, while Silver is weak at 15.01
[B][I]08th July 2015 – 09:38hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 10th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Euro Higher as Greece submits new Bailout Proposal [/B]
Greece has submitted a new detailed proposal to its European creditors asking for a three year bailout loan. The chairman of Euro group finance ministers, Jeroen Dijsselbloem, received the documents which will be assessed by the officials from the European Commission, European Central Bank and International Monetary Fund.
“We got a mandate to bring a better deal than the ultimatum that the Euro group gave us, but certainly not given a mandate to take Greece out of the Eurozone. We are confronted with crucial decisions, we are all in this together” - Greek Prime Minister Alexis Tsipras.
Greek PM Alexis Tsipras has taken care to draft a new proposal along with his cabinet which proposes tax rises, pension reforms meeting the demands of the creditors. The new proposal is due to be approved by the Greek Parliament today and will be presented before the Euro group of Finance minister’s summit on Sunday.
EURUSD is lifted by the news that Greece has submitted a new proposal for bailout from a low of 1.0991 to trade at 1.1118 in the European trading session.
“The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation” - European Council President Donald Tusk.
European Union leaders will be meeting for an emergency summit in Brussels on Sunday where they will decide on the future of the Greece in the Euro. If there is no deal by Sunday then the Greek economy will collapse and possibly leave the Euro.
“Greece seeks to reach an agreement with the institutions immediately, but we want an agreement that will respect the country and the people’s dignity, and that will open windows for a way out of the crisis. We do not want to add a third Memorandum of harsh austerity, suffering and deprivation to the two previous ones without offering a prospect to the country" - Greek Energy Minister.
The future of Greece in the Eurozone will be decided this weekend when the European leaders will discuss a third bailout program in the light of new proposal submitted to them.
US Initial Jobless Claims jumped to 297K, as the number of people applying for unemployment benefits rose more than expected last week.
Bank of England has kept its benchmark interest rate unchanged at 0.5% on backdrop of strong growth. IMF expects British economy to grow 2.7% this year.
In Australia Unemployment rate rose to 6.0% for the month of June according to the Australian Bureau of Statistics.
China’s Consumer Inflation rose to 1.4% for the month of June according to the National Bureau of Statistics.
Crude oil has rebounded to $53.26 as China stock markets have recovered from collapse.
Gold is trading higher in the Europe at 1163.16, while Silver is up at 15.47
[B][I]10th July 2015 – 09:38hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 13th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Eurozone Leaders have reached a Greek Bailout Agreement[/B]
Eurozone leaders have agreed upon a Greek bailout deal and keep Greece in the Euro. European Summit Chair Donald Tusk tweeted in a message “Euro Summit has unanimously reached agreement”. The new bailout proposed for Greece will include serious economic reforms and financial support.
“After 17 hours of negotiations, we have finally reached it. One can say that we have ‘agreement’. Leaders have agreed in principle that they are ready to start negotiations on an ESM programme, which in other words means continued support for Greece” - EU council President Donald Tusk.
“There are strict conditions to be met. The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on an ESM programme to formally begin” - EU council President Donald Tusk.
Following the news EURUSD shot up and touched a high of 1.1195 in the European trading session. Euro was unable to hold on and drifted lower as the traders sentiments shifted towards US rate hike later this year.
The third bailout program for Greece is estimated at 86 billion euros and will require Greek parliament to push legislation including tax and pension reforms as demanded by its creditors.
“Greece had secured debt restructuring and a 35 billion euro growth package. We fought a tough battle. We face difficult decisions” - Greek Prime Minister Alexis Tsipras.
“I think the euro is being pulled down by expectations that higher US rates will support the dollar, and the cost of Greece deal, including a worsening Greek economic crisis and increasing fissures in Europe’s leadership” - strategist at Union Bancaire Privée.
“The country which we help has shown a willingness and readiness to carry out reforms. The advantages far outweigh the disadvantages" - German Chancellor Angela Merkel.
The Greek Parliament needs to approve the terms of the agreement without any delay. A fund will be created to monetize some Greek State assets owned by the Greek government to help pay down the country’s debt.
Greece will also need to seek the assistance of the International Monetary Fund to monitor the country’s adherence to its bailout commitments.
Euro group head Jeroen Dijsselbloem said a fund will be set up to tackle the debt and recapitalization of the country’s banks. The total size of the fund would be around 50 billion euros.
“Once approximately €25 billion needed to recapitalize the banks have been used, 50% of the remaining funds will be used to bring down debt even more, and 50% can be invested in Greece by the Greek government. This is one of the key elements on both debt sustainability and to let growth return to Greece.” - Euro group head Jeroen Dijsselbloem.
Crude oil is trading lower at $51.66 after IEA reported that world oil demand will be slower in the next year.
Gold is trading lower in the Europe at 1156.24, while Silver is weak at 15.47
[B][I]13th July 2015 – 10:05hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 14th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]US Dollar Gains on expectations of Fed Rate Hike this year[/B]
US Dollar rose against its major counterparts after global tensions eased on the news that Eurozone leaders have reached an agreement for a new bailout package for Greece.
Following the Greek deal investor sentiment has improved as they are now looking at the growth divergences between the US and Europe. Safe heaven currencies such as the Japanese Yen and the Swiss Franc are also weak reflecting the investor sentiment.
Globally investors have shifted their focus to the US Federal Reserve as it is expected to hike interest rates later this year.
Fed Chairwoman Janet Yellen will provide more cues of the timing of the rate hike at her semiannual testimony to Congress on Wednesday and Thursday.
Fed Chairwoman Janet Yellen said in her statement last week “It will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.”
The US Dollar remains steady against the Japanese Yen as it touched a high of 123.74 today after the risks of a Greek exit from the Eurozone were avoided.
EURUSD touched a low of 1.0968 as trader’s reverted back to dollar buying after the easing of concerns over Greece and China.
Greek’s 10 year sovereign yields fell to 12.01 per cent, German 10 year yields to 0.85 percent, while the 10-year US Treasury yield rose to 2.44 per cent.
Wall Street rallied on Greek deal with the DJIA and the S&P 500 indices rising +1.22% and +1.11% respectively. The Stoxx600 jumped a further +2%.
Chinese stocks rose with the Shanghai Composite rising 2.4 per cent and the Shenzhen Composite ending 4.2 per cent higher.
In UK CPI Inflation dropped to zero for the month of June, following the significant drop in oil prices at the beginning of this year.
In Germany investor confidence dropped as the ZEW index dropped to 29.7 for the month of June. ZEW economic sentiment for the Eurozone came in at 42.7 amid uncertain conditions in Europe.
China’s Exports increased by 2.8% for the month of June as compared from the previous year. China’s customs department said that the country’s trade performance will improve in the second half of 2015.
Japan industrial production declined 3.9% in May as the world’s third biggest economy faces pressure to sustain a healthy growth in the second half of 2015.
Crude oil is trading lower at $51.18 after Iran reached a nuclear deal which is expected to increase the supply of Iranian crude on world markets.
Gold is trading lower in the Europe at 1153.98, while Silver is weak at 15.35
[B][I]14th July 2015 – 10:34hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 15th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]US retail sales drop in June, weighing on Fed’s interest rate decision[/B]
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.0 billion, a decrease of 0.3 percent from the previous month.
“Unexpectedly weak retail sales data adds to signs that the US economy is slowing again after pulling out of the soft patch earlier in the year” - MarkIt economist Chris Williamson.
“The weakness of the sales data in June, alongside disappointing PMI survey data and a smaller than hoped-for rise in non-farm payrolls, all points to the economy having moved down a gear after this rebound, settling into a far weaker underlying pace of growth than was seen throughout much of last year” - MarkIt economist Chris Williamson.
“The numbers add to a growing body of evidence which suggests that the US economy is slowing again as we head into the second half of the year. Such a slowing will most likely persuade policymakers to hold off on raising rates until next year unless there is a swift revival of demand in coming months” - MarkIt economist Chris Williamson.
Chinese Stock markets fell further, with the Shanghai Composite down by -3.74% while the Shenzhen Composite lost -4.21%.
China’s Economy Grew 7% in the second quarter of the 2015, being supported by the government’s stimulus measures.
Bank of Japan kept its monetary policy unchanged, and downgraded its economic growth outlook for the year 2015. The Bank reduced its growth forecast to 1.7% from 2% for 2015.
In UK Interest rate hike is getting closer due to consistent UK economy’s growth above the trend.
“The point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counterbalanced somewhat by disinflation imported from abroad" - Mark Carney, BoE Governor.
Today Greek parliament is to vote on the bailout plan and pass the proposed reforms needed to secure the loans and avoid the default from the Eurozone. If the vote passes in the Greek parliament today it will require the support of the opposition parties.
Greek needs to pass the bailout plan to avoid a total Banking collapse and get assistance from the European Central Bank thru Emergency Liquidity Assistance.
Crude oil prices have jumped to $52.62 after Iran nuclear deal.
Gold is trading flat in the Europe at 1154.88, while Silver is weak at 15.29
[B][I]15th July 2015 – 10:28hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 16th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Greek Parliament approves Bailout package[/B]
Greek parliament has approved the €86 billion bailout package in a tense voting session with 229 members voting Yes, 64 voting No and 6 members refrained from voting.
The new bailout package demands tough economic reforms imposing sweeping sales tax hikes, reforms in pensions and a series of austerity measures as imposed by the European Union.
“I had specific choices before me: one was to accept a deal I disagree with on many points, another was a disorderly default. We will not back down from our pledge to fight to the end for the right of the working people. There is no other option but for all of us to share the weight of this responsibility” - Greek PM Alexis Tsipras.
The new third bailout package for Greece needs to be passed by the domestic parliaments of the other 19 members of the Eurozone before Greece can receive the Funds. Germany is expected to vote on the new bailout package on Friday.
Eurozone finance ministers will hold a conference call on Thursday to discuss the next steps in finalizing Greece’s third bailout of 86 billion euros and prevent the Greek Bank’s from collapsing.
“We support the government but we disagree with this new memorandum, with these measures. We are the heart and soul of Syriza" - Greek Energy minister.
The European Central Bank is expected to hold a meeting of its governing council to extend financial support to Greek banks, which have remained closed for the last ten days.
“In the absence of a better solution, the European Commission has proposed to the Council to grant short-term emergency assistance to Greece from the EFSM” - European Commission VP, Valdis Dombrovskis.
Yesterday, Fed Chairwoman Janet Yellen said before the House of Representatives that a rate hike in 2015 is still on the table if economy evolves as expected.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target” -Janet Yellen, Fed Chair.
Following the comments US Dollar was higher against its major counterparts with the EURUSD trading at 1.0903 and AUDUSD at 0.7391 in the European trading session.
In US Wholesale prices rose to 0.4% for the month of June according to the Labor department. Meanwhile, core prices increased by 0.3% for the same period. A pickup in the prices would reinforce Fed’s view of raising the interest rates this year.
In UK unemployment rate climbed to 5.6% for the month of June, the first time in more than two years. With good growth prospects the Bank of England has signaled that it is moving closer to hike interest rate this year.
The Bank of Canada has cut its interest rate by 25 basis points to 0.50%, and downgraded GDP forecast to 1% in 2015.
“Additional monetary stimulus is required at this time to help return the economy to full capacity and inflation sustainably to target” -Bank of Canada.
Crude oil prices have moved higher to $51.77 after Greek bailout vote.
Gold is trading lower in the Europe at 1144.79, while Silver is weak at 14.98
[B][I]16th July 2015 – 10:42hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 17th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]ECB Raises ELA to Greek Banks by 900 Million Euros[/B]
European Central Bank President Mario Draghi raised Emergency Liquidity Assistance to Greek Banks providing an additional 900 million euros that would allow Greek banks to reopen.
The ECB has hiked its ELA to Greek banks after the Greek parliament voted in favor of the austerity reforms and the third bailout program for Greece.
“If things continue to proceed in a positive way as they have done in the last two days we will have a phase during the Bank of Greece and the ECB, which are working very actively in monitoring the situation, will look at exactly the needs of the Greek economy” - Mario Draghi, ECB President.
The European Central Bank has kept its interest rates unchanged in an effort to counter deflation as per analyst expectations.
“Recent developments in financial markets, which partly reflect greater uncertainty, have not changed the Governing Council’s assessment of a broadening of the euro area’s economic recovery and a gradual increase in inflation rates over the coming years” - Mario Draghi, ECB President.
“As explained on previous occasions, our monthly asset purchases of EUR60 billion are intended to run until the end of September 2016 and in any case until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below but close to 2 percent over the medium term” - Mario Draghi, ECB President.
“Several positive things have happened that could justify us to increase the ELA we approved today. Incidentally I didn’t say how much. We substantially accommodated the request put forward by the bank of Greece recalibrated over one week. The increase would be €900m over one week” - Mario Draghi, ECB President.
Greek banks will reopen on Monday after being closed for nearly three weeks. Greek Deputy Finance Minister Madras said that withdrawal restrictions will remain in place.
Bank of England Governor Mark Carney said that the UK interest rates could rise around the end of this year.
“In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year” - Mark Carney, BoE Governor.
In US Jobless Claims declined to 281K last week indicating improving labour market conditions.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target” -Janet Yellen, Fed Chair.
In New Zealand Inflation Rose to 0.4% in the second quarter of the 2015, but remained well below the target range of 1% to 3% putting pressure on the Reserve Bank of New Zealand to cut interest rates.
Crude oil prices have moved lower to $50.83 as investors await weekly US Oil rig count.
Gold is trading lower in the Europe at 1143.85, while Silver is weak at 14.98
[B][I]17th July 2015 – 09:26hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 20th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Gold plunges to Five-Year Low as US Interest Rate Rise looms[/B]
Gold plunged to its lowest level in more than five years in the early Asian trading session as investor sentiments were hit on the backdrop of a strong US dollar amid prospects for higher US interest rates in the coming months.
The precious metal fell to drop as much as 5.5 percent touching a low of $1072, its weakest level since March 2010 when Shanghai Gold exchange opened trading early this morning.
Gold is considered as a safe haven investment in times of financial uncertainty, but is seen as a less attractive option in the times of rising interest rates. The prices of Gold tumbled on speculation that Fed is moving closer to raising interest rates after eight years.
“In the physical market this would not be possible because that would consume a whole lot of physical gold. But in the futures market, because it’s all digital, as long as you find a buyer to bid for it then that would be possible” - Luke Chua, Bullion Star Singapore.
“Gold market looks very technically weak and the biggest buyer of all, China, is now selling gold as opposed to buying it on price dips. That’s a recipe for weaker prices” - Victor Thianpiriya, ANZ Bank Singapore.
“I think there’s further downside on the price once the dust settles and the focus shifts back to US dollar strength and the interest rate outlook. The risk of it hitting $1,050 is clearly elevated.” - Victor Thianpiriya, ANZ Bank Singapore.
Greek Banks opened today after being closed for three weeks to restore normalcy with withdrawal limits remaining in place of €420 in a week.
“Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality” - Louka Katseli, Greek bank association.
Canada’s annual inflation rose 1.0% in the month of June, while core inflation climbed 2.3% more than analyst expectations.
“Expectations are more biased for another rate cut. Core CPI is less meaningful to the bank than non-energy exports and gross domestic product at this stage of the game” - Jack Spitz, National Bank of Canada.
The New Zealand Dollar is under selling pressure on speculations that the Reserve Bank of New Zealand (RBNZ) is set to cut interest rates on Wednesday.
NZDUSD is trading at 0.6580 in the European trading session after it opened the week lower at 0.6505 today.
Crude oil prices have moved lower to $50.98 as Saudi Arabian exports fell to the lowest in five months.
Gold is trading lower in the Europe at 1111.47, while Silver is weak at 14.73
[B][I]20th July 2015 – 10:31hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 21st July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Reserve Bank of Australia minutes see steady Interest rates[/B]
Reserve Bank of Australia released its minutes from the July 7 meeting and the Board decided to leave the cash rate unchanged at 2.0 per cent.
Members noted that the exchange rate had thus far offered less assistance than would normally be expected in achieving balanced growth in the economy and that further depreciation seemed both likely and necessary - RBA minutes.
Members noted that global economic conditions remained consistent with growth in Australia’s major trading partners being around average over the period ahead. Global financial conditions were very accommodative and would remain so even in the event that the Federal Reserve started to raise its policy interest rate later in the year - RBA minutes.
Expectations about the timing of the US Federal Reserve’s first increase in the federal funds rate were little changed over the past month. Market pricing continued to suggest that the first increase would occur around the end of 2015. Although commentary by Federal Reserve officials suggested that it could be a little sooner than that, they continued to emphasize that the exact timing of the first increase would be less important than the pace of subsequent increases, which were expected to be gradual - RBA minutes.
In light of current and prospective economic circumstances and financial conditions, the Board judged that leaving the cash rate unchanged was appropriate - RBA minutes.
Greece received emergency bridging loan of €7.2bn from the European Union which was used to repay its debts. The Greek government made payments of €4.2bn to the European Central Bank, which consisted of €3.5bn loan plus €0.7bn interest.
Greece cleared its overdue debt repayments of 2.05 billion euros to the International Monetary Fund.
“The fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth” - IMF.
Meanwhile heavy rush was seen in Greek Banks as queues formed outside bank branches as restrictions remain in place.
“Capital controls and restrictions on withdrawals will remain in place, but we are entering a new stage which we all hope will be one of normality” Louka Katseli, head of the Greek banking association.
Canada’s Wholesale Trade fell for the month of May to C$54.5 billion led by a decrease in motor vehicle sales, according to Statistics Canada.
“Expectations are more biased for another rate cut” - Jack Spitz, National Bank of Canada.
UK public sector net borrowing rose to £8.58 billion for the month of June according to the Office for National Statistics.
Gold prices have consolidated near the $1100 level as investors shift their focus on prospects of higher interest rates in the US.
Crude oil prices have moved lower to $50.44 on supply concerns.
Gold is trading lower in the Europe at 1106.80, while Silver is weak at 14.82
[B][I]21st July 2015 – 11:12hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
Esteemed market commentator, David Buik of Panmure Gordon joined Tip TV today to discuss Greece, Europe, the US, and US stocks in particular.
Greece crisis far from over, just taking a breather
Buik began by noting briefly that the Greece situation is far from over, despite the appearance of calm in the market. He noted that while the banks are open again and there is a semblance of relative normality returning again, that time has been bought and the situation will doubtlessly flair up again.
Goldman Sachs call sits uneasy
When pressed by Zak Mir, technical analyst about Goldman Sachs recommendation to sell US stocks and buy Europe/Japan over the next 3 months, Buik was hesitant, adding “Japan is an underwritten market” and that he has concerns over the financials of some of the domestically focused DAX and CAC constituents. Nevertheless he still sees the DAX as a buy, as it is a sentiment indicator.
Apple set to smash expectations?
Looking to the US, Buik notes that Apple numbers are coming out today and that the market is expecting 47m iphones to have been sold, $49 bln revenue, with 29% of sales taking place in China and sales to have increased by 32%. As such shares are up 40% and Buik thinks CEO Tim Cook deserves enormous credit. However, the strength in the US dollar could be a sour point for US earnings as companies with overseas sales could see profits hit when repatriated.
Don’t expect anything more than a symbolic rate rise
Looking to the US, Buik warns George Osborne not to get too ****y after a sustained period of good economic news, and that he doesn’t expect anything more than a symbolic rate raise, if that.
See more at: Goldman: Sell US, buy Europe/Japan, but EU can’t write off the US - Tip TV
[B]Daily Market Analysis – 22nd July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Bank of England policymakers edge towards Rate hike[/B]
Bank of England released minutes from its July policy meeting which showed that all the nine monetary policy committee members voted unanimously to holding both interest rate at its record low of 0.50 percent and the amount of asset purchases at 375 billion pounds.
In light of recent developments, all members thought it appropriate to leave the stance of monetary policy unchanged at this meeting. For a number of members, the balance of risks to medium-term inflation relative to the 2% target was becoming more skewed to the upside at the current level of Bank Rate - Bank of England.
The sterling effective exchange rate had risen by close to 3% over the month. The actual path that Bank Rate would follow over the next few years was uncertain, and would depend on the economic circumstances - Bank of England.
UK forward short-term interest rates had fallen following the Greek referendum and over the month. Absent that uncertainty, the decision between holding Bank rate at its current level versus a small increase was becoming more finely balanced - Bank of England.
For a number of members, the balance of risks to medium-term inflation relative to the 2 percent target was becoming more skewed to the upside at the current level of bank rate - Bank of England.
After the release of the BoE minutes the pound appreciated 0.4 percent versus the US dollar and is currently trading at $1.5627 in the European trading session.
Investors are expecting the interest rates in UK to increase in the May 2016, as indicated by the BOE Governor Mark Carney.
Greece’s PM Alexis Tsipras seeks support of the Syriza party ahead of the crucial vote on reforms. The vote is expected to be passed with the support of opposition parties to start talks on a new €86bn bailout package for Greece.
EURUSD has recovered from a low of 1.0813 to trade at 1.0930 in the European trading session ahead of the crucial Greek vote.
“We have agreed to lighten the interest burden, lengthen the maturity of the Greek debt. It’s something that can be done when the time comes, after the negotiation of a good program of development and assistance” - Pierre Moscovici, European Union Commissioner.
Reserve Bank of Australia Governor Glenn Stevens said an interest-rate cut is possible as the central bank prefers a weaker Australian dollar to support business and industry.
“That is why we have felt that, on balance, a somewhat lower exchange rate was likely to be a part of the necessary adjustment. That adjustment seems to be occurring, with relatively little disruption, and is having an expansionary effect” -Glenn Stevens, RBA Governor.
In UK public sector borrowing declined to 9.4 billion pounds for the month of June according to the office for National Statistics.
Swiss trade surplus rose to 3.578 billion francs for the month of June according to the Federal Statistics Office.
“The economic outlook for Switzerland has dimmed again, and while analysts expect to see the strongest economic momentum in the Eurozone over the next six months, the present state of the Eurozone economy is still rated as poor” - Credit Suisse
Crude oil prices have moved lower to $50.20 after industry data showed rise in US crude stocks.
Gold is trading lower in the Europe at 1089.54, while Silver is weak at 14.70
[B][I]22nd July 2015 – 11:56hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 23rd July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Reserve Bank of New Zealand Cuts Rates a Second Time[/B]
The Reserve Bank today reduced the Official Cash Rate (OCR) by 25 basis points to 3.0 percent.
Global economic growth remains moderate, with only a gradual pickup in activity forecast. Recent developments in China and Europe led to heightened uncertainty and increased financial market volatility. Particular uncertainty remains around the impact of the expected tightening in US monetary policy - Reserve Bank of New Zealand.
New Zealand’s economy is currently growing at an annual rate of around 2.5 percent, supported by low interest rates, construction activity, and high net immigration - Reserve Bank of New Zealand.
The New Zealand dollar has declined significantly since April and, along with lower interest rates, has led to an easing in monetary conditions. While the currency depreciation will provide support to the export and import competing sectors, further depreciation is necessary given the weakness in export commodity prices - - Reserve Bank of New Zealand.
A reduction in the OCR is warranted by the softening in the economic outlook and low inflation. At this point, some further easing seems likely - Reserve Bank of New Zealand.
Following the rate cut by the RBNZ New Zealand Dollar climbed to a one week high as NZDUSD touched a high of 0.6691 in the European trading session today.
Australian Dollar has declined over the week mainly led by a weakness in the commodity prices and as US economic data boosts expectations for higher interest rates by the Federal Reserve.
Greek parliament has approved the second package of reform measures required for getting the third bailout package of €86bn from the European Union.
The crucial vote saw 230 members voting in the favor, 63 members against it and 5 members abstained from the voting.
Following the vote EURUSD rose from a low of 1.0923 to trade at 1.0991 in the European trading session.
The Standard & Poor’s rating agency has upgraded the credit rating of Greece from CCC- to CCC + with a stable outlook after Greece repaid the IMF and ECB.
"The upgrade reflects Greece’s improved liquidity perspective following last week’s consent, in principle, from the Euro group to the three-year loan program for Greece via the ESM, alongside the provision of €7.16 billion in three-month bridge financing to the Greek government, which it used on July 20 to clear its arrears with the IMF and the Bank of Greece and to repay the ECB” - Standard & Poor’s rating agency.
In UK Retail Sales fell 0.2% in June according to the Office for National Statistics, London.
GBPUSD declined from a peak of 1.5665 to touch a low of 1.5589 due to unexpected drop in the Retail sales.
US Home Resales climbed to their highest level in 8 years in the month of June. Existing Home sales rose 3.2% to an annual rate of 5.49 million.
Crude oil prices have moved lower to $49.19 after US crude oil stocks rose 2.5 million barrels according to the EIA weekly report.
Gold has recovered its losses and is currently trading at 1101.80, while Silver is flat at 14.87
[B][I]23rd July 2015 – 10:20hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 24th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]Gold prices hit 5-year lows on weak China PMI, Global cues[/B]
Gold prices fell in the Asian trading session as globally investors see a slowdown in the Chinese Economy which is one of the top buyers of the precious metal.
Gold touched a record low of $1078.67 in the early trading session and consolidated at $1081.40in the European trading session today.
The China Purchasing Managers Index (PMI) showed a decline to 48.2 a 15-month-low, well below analyst expectation of 49.7 on backdrop of the recent stock market crash and weak global exports.
“In our opinion, the movements in the gold price earlier this year reflected market expectations that the events in Greece or the pullback in Chinese stocks were local – not global – risks and that the possibility of a disorderly outcome was/is still low. This does not necessarily mean that the market is correct. It simply reflects its current view” - World Gold Council.
“Investors now seem focused on the direction of the US dollar and the Fed’s monetary policy stance… The gold price already reflects a possible rate hike later this year and that the US-centered perspective is missing a more comprehensive view of the market” - World Gold Council.
“Whether it happens over before the end of the year, or later, we believe that the gold price should already incorporate, at least in good part, current market expectations of a rate hike. In our view, the gold price may be less susceptible to the first rate hike when it actually occurs and the main focus will be the pace at which the Fed signals it will continue raising rates” - World Gold Council.
“Should the conditions change and the risk of contagion or the unintended consequences of a Greek exit increase, we would expect to see a stronger reaction from the gold price. As a high quality, liquid asset, it is likely that many investors would use gold to protect wealth. Similarly, the recent Chinese stock market sell-off hasn’t resulted in a large uptick in the gold price thus far. A more substantial market correction in China, however, could spill over to other economies, increase uncertainty worldwide and make gold a more relevant hedge” - World Gold Council.
The markets are now focusing on a Federal Reserve rate hike in September this year as geopolitical tension appears eased for now.
“What a conundrum we face: commodities are shouting that the global economy is deteriorating, key emerging markets are already seeing major volatility, and yet the world’s most important central bank is close to tightening monetary policy” - Michael Every, Rabobank
Following the Weak China PMI Australian Dollar has dropped to a low of $0.7285 in the European trading session, the lowest levels since 2009.
Crude oil prices have moved lower to $48.64 on concerns of global oversupply and weak demand.
Gold prices tumbled to 5 year low and is currently trading at 1079.92, while Silver is weak at 14.49
[B][I]24th July 2015 – 10:55hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]
[B]Daily Market Analysis – 27th July, 2015[/B]
[I]By FxGrow Research & Analysis Team[/I]
[B]US Dollar weak ahead of FOMC Rate Decision[/B]
The US Dollar is weak ahead of the much awaited Federal Open Market Committee policy meeting this week on Wednesday.
According to the Analyst expectations 80% believe that Fed will hike interest rates in September and give a clear direction to the future rate hikes.
The Fed officials will meet on Tuesday and Wednesday and issue a statement at the conclusion of Wednesday’s meeting. Investors will be looking for directions as to whether the Fed is moving closer to raising interest rates in September this year.
Globally investors seem to be cautious if Fed fails to give any indication of a September rake hike in its policy meeting on Wednesday.
In the FOMC statement, look for only minor cosmetic changes to the post-meeting communique… do not expect policymakers to provide any new clues with regard to a potential rate hike in September - Deutsche bank.
In the minutes to the April meeting the FOMC had a discussion about whether or not to signal in the statements leading up to liftoff that a rate hike is likely coming in the near term. The Committee concluded that it would not signal a rate hike in the meeting prior to liftoff. Instead, the first hike would be decided on a meeting-by-meeting basis - JP Morgan.
The July FOMC statement should emphasize data dependence and eschew any overt signals about the timing of liftoff. We look for a cautiously optimistic assessment of the outlook as data have been somewhat more mixed since the June meeting. With the market pricing less than a 40% chance of a September hike, July communications should push those odds up slightly - Bank of America.
At issue is whether the FOMC will alter its forward guidance to prepare the markets explicitly for a near-term rate hike. If the Committee feels confident it can start normalizing policy in September, which has been our forecasted lift-off date, we believe it will adjust the language - Credit Suisse.
The Euro zone’s manufacturing sector declined as the PMI for the Euro area came in at 52.2 for the month of July. German PMI fell to 52.2 while French PMI fell to 49.6 in the month of July.
“Eurozone economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large ‘business as usual’ for the region as a whole” - Chris Williamson, chief economist at Markit.
Crude oil prices have moved lower to $47.87 due to a weak trend in Asia and slump in the manufacturing sector in China.
Gold has recovered its losses and is currently trading at 1099.57, while Silver is flat at 14.68
[B][I]27th July 2015 – 09:55hrs GMT[/I][/B]
[B][I]For more in depth Research & Analysis please visit FxGrow.[/I][/B]
[I][B]Note:[/B] This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.[/I]